L

lations issued by the Secretary concerned. Paragraph 22-65, Army Regulations 37-104, December 2, 1957, provides, in part, as follows: 22-65. Repayment Upon Expiration of 3-Year Period of an Enlistment Greater Than 3 Years

a. Request Submitted on Third Anniversary. Deposits, with accrued interest, are authorized to be repaid upon expiration of each 3-year period of any enlistment greater than 3 years. A member should submit a written request to the finance and accounting officer at the expiration of the third anniversary of such enlistment requesting repayment of deposits plus interest. The finance and accounting officer will attach this request to SF 1049 when repayment is made as evidence of the disposition of the money due the depositor.

b. Request Submitted Subsequent to Third Anniversary. If a member did not submit a written request on the third anniversary, payment will not be precluded if the request is submitted subsequent to the third anniversary of his current enlistment. The repayment, however, will include only such amounts on deposit at the expiration of the 3-year period and interest accrued thereon through the date of repayment. ***

Paragraph 11011d, Air Force Manual 173-20, authorizes repayment of deposits with accrued interest any time after the expiration of each 3-year period of an enlistment greater than 3 years. It is understood that the Navy and the Marine Corps do not authorize repayment of deposits upon the expiration of a 3-year period of an enlistment greater than 3 years. The foregoing regulations of the Army and the Air Force relating to repayment of deposits with interest prior to discharge appear to be within the scope of 10 U. S. C. 1035 (c) and question la is answered in the affirmative to the extent that payment of interest is authorized under such regulations.

It long has been held that interest does not accrue upon an enlisted man's deposits after the date of his discharge. 8 Comp. Dec. 739, 31 Comp. Gen. 178. Notwithstanding such rulings, current regulations contained in paragraph 22–36 (5), Army Regulations 37-104, December 2, 1957, state that interest on deposits will continue to accrue, when repayment is not effected, upon discharge and immediate reenlistment or upon retirement and immediate recall to active duty. It is reported that such regulations, and similar regulations contained in Change 2, Army Regulations 35-1550, October 24, 1955, were promulgated in the belief that the cited decisions were based primarily on the service regulations in effect at the time those decisions were rendered. While those decisions refer to such regulations, the regu lations merely reflected the provision of law there quoted which authorized payments of interest on deposits to a soldier "on [or prior to] his final discharge." See section 1306 of the Revised Statutes, as amended, 10 U. S. C. 907 (1952 Ed.). To the same effect, was the act of July 15, 1954, which authorized payment of interest to an enlisted member "upon [or, under certain conditions, prior to] final discharge." The omission of the word "final" before the word "discharge" in the language used in 10 U. S. C. 1035 (c), which provides that payments of deposits and interest thereon "may be made only to the member upon discharge or at such time before his discharge

as may be prescribed by the Secretary concerned," was not intended as effecting any change in the law. See section 49 (a) of the act of August 10, 1956, 70A Stat. 640.

It appearing that there has been no substantial change in the applicable provisions of law, there appears to be no basis for questioning the rule which has been followed by the accounting officers of the Government for more than 70 years. It is clear that an enlisted member is entitled to payment of his deposits and accrued interest at the time of his discharge, even though he reenlists immediately. If he wishes to have that money continue to draw interest, it must be redeposited, in which event both principal and the accrued interest so redeposited will draw interest. The withdrawal and redeposit may be accomplished in one transaction on the request of the member concerned as provided in paragraph 22–63, Army Regulations 37-104. See also, paragraph 22-466 of such regulations.

Questions 1b and 1c are answered in the negative.

Concerning the matter of compound interest, we find nothing in the language contained in 10 U. S. C. 1035 relating to the payment of interest which would permit a change in the regulations to provide that interest be compounded as of the date following the date of expiration of each 3-year period of an enlistment greater than 3 years. Question 2 is answered accordingly. As indicated by the answers to questions 1b and 1c, interest would be compounded after discharge and immediate reenlistment, or after retirement and immediate recall to active duty, only in the event that the accrued interest payable at the time of discharge or retirement is redeposited. If deposits withdrawn with accrued interest at the expiration of each 3-year period of an enlistment greater than 3 years under paragraph 22–65, Army Regulations 37-104, are redeposited under paragraph 22-466 of such regulations, the total amount of the redeposit involved, including the accrued interest, would earn interest until its withdrawal again is authorized.

[B-122179]

Military Personnel-Per Diem-Field Duty-Amendatory Orders

On the basis of a showing that an administrative error was made in designating duty in connection with "Operation Deepfreeze" on the Antarctic Continent as maneuvers, field exercises or other similar activities as contemplated by paragraph 4250-3 of the Joint Travel Regulations and that the amendatory orders were issued on a re-evaluation of the actual facts which indicates that the duty relates to the International Geophysical Year and includes research, exploration, construction and maintenance, per diem payments may be made. 37 Comp. Gen. 126, modified.

Temporary duty orders which designate a particular type of duty as maneuverfield exercise or other similar activity within the purview of paragraphs 4201-6 and 4250-3 of the Joint Travel Regulations which preclude payment of per

diem will be given effect in the audit of accounts and settlements of claims on the basis of such designation for the reason that the order issuing authority should be well acquainted with the conditions under which the duty will be performed.

To the Secretary of the Navy, April 17, 1958:

Reference is made to letter of March 6, 1958, from the Assistant Secretary of the Navy (Material), requesting reconsideration of our decision to you dated August 22, 1957, 37 Comp. Gen. 126, removal of all audit exceptions based on that decision, and approval of all otherwise proper payments of per diem allowances for temporary duty on the Antarctic Continent for the entire period of such duty performed under the orders enclosed, as modified, and other similar orders.

The orders here involved are similar to those considered in our decision of August 22, 1957, in that the original orders included a provision that the ordered temporary duty was considered to be field duty and that provision later was deleted by memorandum endorsement dated November 5, 1956, from COMAIRLANT, the authority which directed the issuance of the original orders. It was assumed by us that the original determination by the Commander Air Force, U. S. Atlantic Fleet, that duty on the Antarctic Continent was field duty, was based on the consideration of the actual facts involved. The memorandum endorsement of November 5, 1956, contained no information which indicated that such determination was incorrect and the endorsement appeared to be based on considerations other than the actual facts involved. On the showing made, it was felt that the matter was too doubtful to warrant the conclusion that the memorandum endorsement constituted a proper amendment to the original orders and you were advised that payment on the submitted voucher, which involved the period prior to November 5, 1956, was not authorized. The copy of the audit exception enclosed with the Assistant Secretary's letter of March 6, 1958, involved the period November 5, 1956, to January 20, 1957.

In letter of June 27, 1957-considered in our decision of August 22, 1957-the Assistant Secretary of the Navy (Financial Management) expressed the view that the duty performed in Antarctica was not similar to the type of duty mentioned in paragraph 4250-3 of the Joint Travel Regulations. It is now strongly asserted that you do not consider Operation Deepfreeze as coming within the purview of such regulations, it being stated that the duty is performed at military installations of a permanent nature and that since Operation Deepfreeze is a project of a contemplated duration of several years in connection with the International Geophysical Year and includes assignments relating to research, exploration, construction and maintenance, it cannot be conceived as constituting the maneuver-field

exercise or other "similar activities" type of duty contemplated by paragraph 4250-3 of the Joint Travel Regulations. It is stated further that the field duty designation in the orders involved was an error on the part of the Commander Air Force, U. S. Atlantic Fleet, apparently being based on misinformation concerning the conditions of the installation and nature of the assignments on the Antarctic Continent, and that the modification was issued on reevaluation of the actual facts involved.

It has been our policy to give effect to provisions in orders designating a particular duty as of a type covered by paragraphs 4201-6 and 4250-3 of the Joint Travel Regulations because of the probability that the order issuing authority is well acquainted with the conditions. under which it is expected that the duty will be performed, and we will continue to audit payments and consider claims on that basis. Since it now appears, however, that the original orders in these cases were in error and that the reference in such orders to field duty was deleted for that reason, otherwise proper payments of per diem may be made administratively for periods prior to the issuance of the amendatory orders and exceptions issued against payments made on and after the effective date of such amendatory orders will be removed. 24 Comp. Gen. 439. The decison of August 22, 1957, is modified accordingly.

[B-134636]

Contracts-Mistakes-Price Adjustment-To Next Low Bid

Under a contract which was awarded, without knowledge of a patent ambiguity in the payments terms, on the basis of total price less prompt payment discount, although the contractor intended the price to be net and has substantiated the intended net price, payment after delivery is limited to the reasonable value of the material not to exceed the next lowest correct bid, and the contractor, after proving that a discount was not intended, may not recover the discount upon the Government's failure to make prompt payment.

To the International Harvester Company, April 17, 1958:

Reference is made to letters dated March 11 and April 8, 1958, from your Credit and Collection Department, requesting a refund of your erroneously offered prompt payment discount on the ground that payment was not made by the Government within the discount period stated in your bid submitted in response to invitation No. DA-15056-57-254.

In response to invitation No. DA-15-056-57-254, soliciting bids for furnishing Oliver Super 55 or equal tractors to Fort Campbell, Kentucky, you submitted a bid with patently ambiguous payment terms in that in Standard Form 33 you offered a unit price of $1,966.44 less a

prompt payment discount of "21 percent, 30 calendar days" whereas in the cover letter accompanying the Standard Form you stated, "Terms will be net cash thirty (30) days from first of month succeeding month of shipment." The contracting officer did not notice the conflict in the terms of payment and he considered your bid to be $1,966.44 less 21 percent, or $1,553.49 net. When the discount was taken into consideration, your bid was lower than the five other bids received, which ranged from $1,568.50 to $2,643.48, and it was in line with the Government's estimate of $1,500. Accordingly, on June 27, 1957, the contracting officer made an award to you for two tractors in the total amount of $3,932.88 less 21 percent discount, 30 calendar days.

After you delivered the tractors and were tendered payment for them in the total amount of $3,932.88 less the 21 percent discount, you alleged an error in bid, explained how the error occurred, submitted a photostatic copy of your worksheet as evidence that your intended unit price was $1,966.44 net, and requested relief. The Department of the Army submitted the matter to our Office for our consideration. By decision to the Secretary of the Army, B-134636, dated January 10, 1958, we held that you had sufficiently established that your intended unit price was $1,966.44 net, but we limited relief to $1,568.50, the next low bid.

Now, in your letter dated March 11, 1958, you state:

We frankly admit the error in showing the incorrect amount of discount on Invitation to bid form No. 33, but wish to point out that payment for the tractors was not made within the 30 calendar days which would permit the allowance of the cash discount.

As a general rule, when a unilateral error is alleged after award, the contract is presumed in law to express the understanding of the parties. However, when the party not in error should have suspected or had reason to know of the existence of the error, rescission of the contract is allowed. Moffett, Hodgkins & Clarke Co. v. City of Rochester, 178 U. S. 373; C. N. Monroe Manufacturing Co. v. United States, 143 F. Supp. 449, and cases cited therein; 5 Williston on Contracts 1578; 3 Corbin on Contracts 610, 614; 52 A. L. R. 2d 802; and id. footnote 9. If when the contract is rescinded, the intended goods have been delivered, restitution is made on the basis of the reasonable value of the full performance, limited to the next lowest correct bid. C. N. Monroe Manufacturing Co. v. United States, supra; Shepard v. United States, 95 C. Cls. 407; 26 Comp. Dec. 286; 2 Comp. Gen. 503; 17 id. 841; and 36 id. 585. The rationale for limiting relief to the next lowest correct bid is that the contracting officer is bound by mandatory provisions of law, 10 U. S. C. 2305 (b), to make the award to the lowest responsible bidder and, therefore, has no authority to bind the Government to other than the lowest correct bid price received.